Home » Analyst Views » K12 Inc (NYSE:LRN) Costs Of Goods Sold Stands At $607.756 Millions

K12 Inc (NYSE:LRN) Costs Of Goods Sold Stands At $607.756 Millions

on May 28, 2016

For the fiscal ended 2015-06-30, K12 Inc (NYSE:LRN) comprehensive income was $-1.065 millions and for the quarter ended 2015-06-30, it was $-1.065 millions.

K12 Inc (NYSE:LRN) posted $9.326 millions on net loss/income for the fiscal closed 2015-06-30. For the quarter ended 2015-06-30, it came at $9.326 millions.

Cost of goods sold

For the year ended 2015-06-30, K12 Inc (NYSE:LRN) costs of goods sold was $607.756 millions. This figure came at $607.756 for the quarter ended 2015-06-30.

The cost of goods sold is posted on the income statement and is stated as cost of the accounting period. By comparing the revenues from the goods sold and cost of the goods sold, the matching concept of accounting is achieved. Also, cost of goods sold deducted from the sales revenues represents gross profit. By adjusting the cost of the goods manufactured or purchased by the change in record of finished goods gives cost of goods sold.

Deferred revenue

K12 Inc (NYSE:LRN) current deferred revenue was $24.927 millions, for the year ending on 2015-06-30. It was $24.927 millions for the quarter closed 2015-06-30.

K12 Inc (NYSE:LRN) posted $7.692 millions for the fiscal ended 2015-06-30, which was $7.692 millions for the quarter closed 2015-06-30.

EBIT and EBIT margins

K12 Inc (NYSE:LRN) EBIT for the year ended 2015-06-30 and quarter 2015-06-30 came at $18.4271 millions and $18.4271 millions, respectively.

K12 Inc (NYSE:LRN) announced EBIT margin of 18.4271% and 18.4271% for the year ended 2015-06-30 and quarter ended 2015-06-30, respectively.

EBIT is a measure of a firm’s earning capacity from ongoing businesses, equal to earnings before subtraction of income taxes and interest. It excludes expenditure and income from unusual, discontinued or non-recurring activities. In event of a firm with minimal amortization activities and depreciation, EBIT is tracked closely by creditors, because it indicates the amount of funds that such a firm will be able to deploy to pay off creditors, also termed operating profit.

EBITDA and EBITDA margins

K12 Inc (NYSE:LRN) reported EBITDA of $18.4271 millions for the year closed 2015-06-30. EBITDA for the quarter closed 2015-06-30 was 18.4271 millions. For the fiscal ended 2015-06-30 EBITDA margin was 18.4271%

Book value

K12 Inc (NYSE:LRN) book value for the fiscal ended 2015-06-30 was $14.0065. The book value was $14.0065 for the quarter ended 2015-06-30.

Common shares count

K12 Inc (NYSE:LRN) common shares for the fiscal closing 2015-06-30 was 38.335. For the quarter ended 2015-06-30, there were 38.335 common shares outstanding.

This Little Known Stocks Could Turn Every $10,000 into $42,749!

Learn how you could trade stocks with 91% to 100% success rate by using this
revolutionary indicator that predicts when certain stocks are on the move.

You could be making up to 199% on a single trade in only 14 days.

Click Here to See This Now.

Tweet

Like

Share

0

0

Enter your email address below to receive ButtonwoodResearch.com’s daily market update. You will receive FREE daily commentary, Top Gainer and Biggest Loser, and Market Analysis for Equity Investors, Swing Traders, and Day Traders.

Email Address *

Privacy Policy

 

Most Popular

Amazon.com, Inc. (NASDAQ:AMZN) Partners With Tyson Foods, Inc. (NYSE:TSN) To Launch Meal Kits Services This Fall

Alphabet Inc (NASDAQ:GOOGL) ANZ Promotes Jason Pellegrino As New Managing Director

How Apple Inc. (NASDAQ:AAPL) Plan To Fight It Out?

Microsoft Corporation (NASDAQ:MSFT) 10 Million Strands Of Laboratory-Made Molecules Of DNA From Start-Up, Twist Biosciences

Amazon.com Inc. (NASDAQ: AMZN) Alexa and Invoxia Triby Collaborates To Sell More Of Kitchen Stuff

Movers

Wedbush upgrades stock rating for Salesforce.com, Inc. (NYSE:CRM) to Outperform

Raymond James sees Allenex acquisition boosting CareDx Inc (NASDAQ:CDNA)’s topline by 50%

S&P Capital IQ sees 79% spike in Sunedison Inc (NYSE:SUNE)’s 2016 revenue

MKM Partners raised PT for Facebook Inc (NASDAQ:FB) to $130 from $120

Janney maintains Buy rating on Sunedison Inc (NYSE:SUNE)

© 2015 InvestorNewswire.com All rights reserved.

K12 Inc (NYSE:LRN) Comprehensive Income At $-1.065 For Period Ended 2015-06-30

For the year ended 2015-06-30, K12 Inc (NYSE:LRN)comprehensive income was $-1.065 millions while for the quarter ended 2015-06-30, it was $-1.065 millions.

K12 Inc (NYSE:LRN) posted $9.326 millions on consolidated net income/loss for the year ended 2015-06-30. For the quarter ended 2015-06-30, it came at $9.326 millions.

Cost of goods sold

For the year ended 2015-06-30, K12 Inc (NYSE:LRN) spent $607.756 millions as the costs of goods sold, which stood at $607.756 millions for the quarter ended 2015-06-30. Cost of goods sold are the direct costs related to the production of the products sold by a firm. This includes the materials costs used in manufacturing the good in addition to the direct labor costs deployed to manufacture the good. It discounts indirect expenses including sales force costs and distribution costs. Cost of goods sold comes on the income statement and it can be reduced from revenue to compute a company’s gross margin. It is also known as “cost of sales.”

Deferred revenue

K12 Inc (NYSE:LRN) concluded the year ended 2015-06-30 with current deferred revenue of $24.927 millions, which amounted to $24.927 millions for the quarter ended 2015-06-30.

K12 Inc (NYSE:LRN) reported $7.692 millions for the year ended 2015-06-30. This figure for the quarter ended 2015-06-30 was $7.692 millions.

EBIT and EBIT margins

For the year ended 2015-06-30 and quarter 2015-06-30, K12 Inc (NYSE:LRN) reported EBIT of $18.4271 millions and $18.4271 millions, respectively.

K12 Inc (NYSE:LRN) posted EBIT margin of 18.4271% and 18.4271% for the year ended 2015-06-30 and quarter ended 2015-06-30, respectively.

EBIT measures the profitability of a firm without considering its tax implications or cost of capital. It helps reduce these two variables that can vary from firm to firm, and allows one to evaluate operating profitability as a particular measure of performance. This analysis is mainly important when assessing similar firms across a single industry. EBIT margin is a computation of a firm’s profit which is computed as EBIT divided by net revenue.

EBITDA and EBITDA margins

K12 Inc (NYSE:LRN) reported EBITDA of $18.4271 millions for the year ended 2015-06-30. EBITDA for the quarter ended 2015-06-30 was 18.4271 millions. For the year ended 2015-06-30 EBITDA margin came at 18.4271%

Book value

Book-value per share for K12 Inc (NYSE:LRN) for the year ended 2015-06-30 was $14.0065. For the quarter ended 2015-06-30, the book value was $14.0065.

Common shares count

Common shares count at the end of the year ended 2015-06-30 was 38.335. For the quarter ended 2015-06-30, there were 38.335 common shares outstanding.

K12 Inc. (NYSE:LRN) Reports Bad News, But Blames Contract Changes

0

The management of K12 Inc. (NYSE:LRN) has attempted to explain why its headline result for F3Q2016 couldn’t match a similar quarter last year: changes in a major client account. Revenue in F3Q2016 as well as in the nine months to March 2016 fell compared to a similar period a year earlier because of the same reason.

The affected client account was that of Agora Cyber Charter School. K12 Inc. (NYSE:LRN) said that contracted moved to Non-managed from Managed program, thus causing revenue disruption.

What was the report for 1Q?

K12 Inc. (NYSE:LRN)’s F3Q2016 revenue of $221.3 million marked a pullback from $224.6 million in a similar quarter a year ago. Non-GAAP EBITDA of $36.7 million also fell from $45.2 million in the previous year.

Almost all of K12’s key financial metrics fell in the latest quarter compared to a year ago because operating income of $19.1 million was down from $27.4 million in 1Q2015. Net income attributable to common shareholders contracted to $14.3 million from $17 million and diluted EPS attributable to common shareholders shrunk to $0.37 from $0.45.

What about the nine months to end of March?

The narrative was largely the same. Revenue of $651.4 million in the first nine months of F2016 was down from $712.6 million in the first nine months of F2015. Non-GAAP EBITDA of $64 million pulled back from $87 million and operating income of $13.4 million sharply down from $34.7 million.

K12 Inc. (NYSE:LRN) further reported that net income attributable to common shareholders of $10 million was down from $22.6 million in the initial nine months of F2015. The same story went for diluted EPS attributable to shareholders that came in at $0.26 relative to $0.60 in the initial nine months of F2015.

Performance in line with expectations

Despite the pullback in both the results of F3Q2016 and the first nine months of F2015, CEO, Stuart Udell, insisted that the company continues to achieve results according to its guidance for the year. Perhaps that is another way of saying that the transition of the Agora Cyber Charter School contract was expected and had been baked in the projections for the year.

What about the future?

For F4Q2016, K12 Inc. (NYSE:LRN) is looking for revenue in the band of $205 to $215 million. Operating income for the quarter is expected to be between $5 million and $9 million.

K12 Inc. Reports Third Quarter Fiscal 2016 with Revenue of $221.3 Million

April 27, 2016 07:00 ET

| Source: K12 Inc.

HERNDON, Va., April 27, 2016 (GLOBE NEWSWIRE) — K12 Inc. (NYSE:LRN), a technology-based education company and leading provider of proprietary curriculum and online school programs for students in pre-K through high school, today announced its results for the third fiscal quarter ended March 31, 2016.

Financial Highlights for the Three Months Ended March 31, 2016 (Third Quarter Fiscal Year 2016)

  • Revenues of $221.3 million, compared to $244.6 million in the third quarter of FY 2015.
  • EBITDA, a non-GAAP measure (see reconciliation below), of $36.7 million, compared to $45.2 million in the third quarter of FY 2015.
  • Operating income of $19.1 million, compared to $27.4 million in the third quarter of FY 2015.
  • Net income attributable to common stockholders of $14.3 million, compared to $17.0 million in the third quarter of FY 2015. 
  • Diluted net income attributable to common stockholders per share of $0.37, compared to $0.45 in the third quarter of FY 2015. 

Financial Highlights for the Nine Months Ended March 31, 2016

  • Revenues of $651.4 million, compared to $712.6 million for the first nine months of FY 2015.
  • EBITDA, a non-GAAP measure (see reconciliation below), of $64.0 million, compared to $87.0 million for the first nine months of FY 2015.
  • Operating income of $13.4 million compared to $34.7 million for the first nine months of FY 2015.
  • Net income attributable to common stockholders of $10.0 million, compared to $22.6 million for the first nine months of FY 2015.
  • Diluted net income attributable to common stockholders per share of $0.26, compared to $0.60 for the first nine months of FY 2015.

Changes to the year-over-year financial results, for the three and nine months ended March 31, 2016, are primarily due to the transition of the Agora Cyber Charter School contract from a managed to a non-managed program.

Comments from Management                         

“We continue to achieve financial results in line with the guidance we provided for the year,” said Stuart Udell, Chief Executive Officer. “I am also extremely proud of this year’s academic accomplishments and the extraordinary efforts of our dedicated teachers and school teams.  While we have made great strides in the last few years, we will continue to work with our partners to further improve the academic outcomes for all the students we serve,” added Udell.

Cash, Capital Expenditures and Capital Leases

As of March 31, 2016, the Company had cash and cash equivalents of $199.5 million, an increase of $3.6 million compared to the $195.9 million reported at June 30, 2015. This increase is largely the result of normal seasonal trends.

Capital expenditures for the nine months ended March 31, 2016 were $41.0 million, a decrease of $4.3 million from the prior year’s first nine months, and was comprised of:

  • $2.5 million for property and equipment,
  • $26.3 million for capitalized software development, and
  • $12.2 million for capitalized curriculum.

Capital leases financed additional purchases of $6.9 million during the nine months ended March 31, 2016, primarily for student computers.  This compares to capital leases financed during the nine months ended March 31, 2015 of $12.1 million.

Revenue

The following table sets forth the Company’s revenues — Managed Public School Programs (curriculum and services sold to managed public schools), Institutional (curriculum, technology and services provided to school districts, public schools and other educational institutions that the Company does not manage), and Private Pay Schools and Other (private schools for which the Company charges student tuition and makes direct consumer sales) – for the periods indicated.

Beginning in fiscal 2016, the Company has presented revenue from Non-managed Programs as part of the Institutional line of business, along with the Institutional Software and Services, which together constitute total Institutional revenue.  In the prior year these revenues were presented as part of the Public School Programs line of business, which included both Managed and Non-managed Public School Programs. We believe this revised presentation clarifies and better aligns the disclosure of Non-Managed Program revenues with the Company’s operational and sales structure.

  Three Months Ended   Change   Nine Months Ended   Change
  March 31,   2016 / 2015   March 31,   2016 / 2015
($ in thousands)   2016     2015       $   %     2016     2015       $   %
Managed Public School Programs (1) $ 185,832   $ 213,230     $ (27,398 )   -12.8 %   $ 533,633   $ 612,344     $ (78,711 )   -12.9 %
Institutional                      
Non-managed Public School Programs (1)   13,145     9,324       3,821     41.0 %     44,441     31,009       13,432     43.3 %
Institutional Software & Services   10,645     10,954       (309 )   -2.8 %     36,134     35,670       464     1.3 %
Total Institutional   23,790     20,278       3,512     17.3 %     80,575     66,679       13,896     20.8 %
Private Pay Schools and Other   11,718     11,115       603     5.4 %     37,173     33,617       3,556     10.6 %
Total $ 221,340   $ 244,623     $ (23,283 )   -9.5 %   $ 651,381   $ 712,640     $ (61,259 )   -8.6 %
(1) Managed Programs include schools where K12 provides substantially all of the management, technology and academic support services in addition to curriculum, learning systems and instructional services. Non-managed Programs include schools where K12 provides curriculum and technology, and the school can also contract for instruction or other educational services.  Non-managed programs, however, do not offer primary administrative oversight.

Enrollment Data

The following table sets forth enrollment data for students in Managed Public School Programs and our Non-managed Public School Programs for the periods indicated.  These figures exclude enrollments from classroom pilot programs and consumer programs.

  Three Months EndedMarch 31,   2016 / 2015   Nine Months EndedMarch 31,   2016 / 2015
  2016   2015   Change    Change %   2016   2015   Change    Change %
Managed Public School Programs (1,2) 104,640   115,330     (10,690 )     -9.3 %   104,229   116,198     (11,969 )     -10.3 %
Non-managed Public School Programs (1) 26,816   20,165     6,651       33.0 %   27,326   20,341     6,985       34.3 %
(1) If a school changes from a Managed to a Non-managed program, the corresponding enrollment classification would change in the period in which the contract arrangement changed.
(2) Managed Public School Programs include enrollments for which K12 receives no public funding or revenue.

Revenue per Enrollment Data

The following table sets forth revenue per average enrollment data for students in Public School Programs for the periods indicated.

  Three Months Ended   Change   Nine Months Ended   Change
  March 31,   2016 / 2015   March 31,   2016 / 2015
    2016     2015     $ %     2016     2015     $ %
Managed Public School Programs $ 1,776     $ 1,849     $ (73 )     -3.9 %   $ 5,120     $ 5,270     $ (150 )     -2.8 %
Non-managed Public School Programs   490       462       28       6.0 %     1,626       1,524       102       6.7 %

Fourth Quarter Outlook

The Company is forecasting the following for the fourth quarter of FY 2016:

  • Revenue in the range of $205 million to $215 million.
  • Operating income in the range of $5 million to $9 million.
  • Capital expenditures, which includes curriculum and software development, computers and infrastructure, of $22 million to $27 million.

Special Note on Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as “anticipates,” “believes,” “estimates,” “continues,” “likely,” “may,” “opportunity,” “potential,” “projects,” “will,” “expects,” “plans,” “intends” and similar expressions to identify forward looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based upon information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, but are not limited to: reduction of per pupil funding amounts at the schools we serve; inability to achieve sufficient levels of new enrollments to sustain or to grow our business model; failure of the schools we serve to comply with regulations resulting in a loss of funding or an obligation to repay funds previously received; declines or variations in academic performance outcomes as curriculum and testing standards evolve; harm to our reputation resulting from poor performance or misconduct by operators or us in any school in our industry and in any school in which we operate; legal and regulatory challenges from opponents of virtual public education, public charter schools or for-profit education companies; discrepancies in interpretation of legislation by regulatory agencies that may lead to payment or funding disputes; termination of our contracts with schools due to a loss of authorizing charter; failure to enter into new school contracts or renew existing contracts, in part or in their entirety; unsuccessful integration of mergers, acquisitions and joint ventures; failure to further develop, maintain and enhance our technology, products, services and brands; inadequate recruiting, training and retention of effective teachers and employees; infringement  of our intellectual property; non-compliance with laws and regulations related to operating schools in a foreign jurisdiction; entry of new competitors with superior competitive technologies and lower prices; and other risks and uncertainties associated with our business described in the Company’s filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of April 27, 2016, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

Conference Call

The Company will discuss its third quarter fiscal year 2016 financial results during a conference call scheduled for Wednesday, April 27, 2016 at 8:30 a.m. eastern time (ET).

The conference call will be webcast and available at http://public.viavid.com/index.php?id=119013.  Please access the web site at least 15 minutes prior to the start of the call.

To participate in the live call, investors and analysts should dial (877) 407-4019 (domestic) or (201) 689-8337 (international) at 8:15 a.m. (ET). No passcode is required. 

A replay of the call will be available starting on April 27, 2016 at 11:00 a.m. ET through May 27, 2016 at 11:00 a.m. ET, at (877) 660-6853 (domestic) or (201) 612-7415 (international) using conference ID 13634573. A webcast replay of the call will be available at http://public.viavid.com/index.php?id=119013 for 30 days.

Financial Statements

The financial statements set forth below are not the complete set of K12 Inc.’s financial statements for the three months and nine months ended March 31, 2016, and are presented below without footnotes. Readers are encouraged to obtain and carefully review K12 Inc.’s Form 10-Q for the quarter ended March 31, 2016, including all financial statements contained therein and the footnotes thereto, filed with the SEC. The Form 10-Q may be retrieved from the SEC’s website at www.sec.gov or from K12 Inc.’s website at www.k12.com.

K12 INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,   June 30,
  2016       2015  
  (In thousands, except share and per share data)
ASSETS      
Current assets      
Cash and cash equivalents $ 199,508     $ 195,852  
Accounts receivable, net of allowance of $9,949 and $9,657 at March 31, 2016 and June 30, 2015, respectively   222,884       188,246  
Inventories, net   16,146       29,571  
Deferred tax asset   8,406       8,989  
Prepaid expenses   16,837       11,428  
Other current assets   24,797       24,877  
Total current assets   488,578       458,963  
Property and equipment, net   26,717       34,407  
Capitalized software, net   67,710       62,683  
Capitalized curriculum development costs, net   58,345       58,696  
Intangible assets, net   19,347       21,195  
Goodwill   66,160       66,160  
Deposits and other assets   7,049       6,495  
Total assets $ 733,906     $ 708,599  
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY              
Current liabilities      
Current portion of capital lease obligations $ 13,453     $ 16,635  
Accounts payable   15,745       29,819  
Accrued liabilities   14,209       12,486  
Accrued compensation and benefits   26,898       26,790  
Deferred revenue   50,898       24,927  
Total current liabilities   121,203       110,657  
Capital lease obligations, net of current portion   9,660       13,022  
Deferred rent, net of current portion   6,958       7,692  
Deferred tax liability   27,654       22,456  
Other long-term liabilities   6,475       8,233  
Total liabilities   171,950       162,060  
Commitments and contingencies          
Redeemable noncontrolling interest   9,801       9,601  
Stockholders’ equity              
Common stock, par value $0.0001; 100,000,000 shares authorized; 42,593,095 and 41,837,894 shares issued and 39,090,497 and 38,335,296 shares outstanding at March 31, 2016 and June 30, 2015, respectively   4       4  
Additional paid-in capital   668,238       663,461  
Accumulated other comprehensive loss   (643 )     (1,065 )
Accumulated deficit   (40,444 )     (50,462 )
Treasury stock of 3,502,598 shares at cost at March 31, 2016 and June 30, 2015   (75,000 )     (75,000 )
Total stockholders’ equity   552,155       536,938  
Total liabilities, redeemable noncontrolling interest and equity $ 733,906     $ 708,599  
K12 INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended   Nine Months Ended
  March 31,   March 31,
  2016       2015       2016       2015  
  (In thousands, except share and per share data)
Revenues $ 221,340     $ 244,623     $ 651,381     $ 712,640  
Cost and expenses                              
Instructional costs and services   134,755       148,985       403,374       440,857  
Selling, administrative, and other operating expenses   64,888       64,871       225,598       226,972  
Product development expenses   2,563       3,337       9,004       10,065  
Total costs and expenses   202,206       217,193       637,976       677,894  
Income from operations   19,134       27,430       13,405       34,746  
Interest expense, net   (101 )     (315 )     (596 )     (134 )
Income before income tax expense and noncontrolling interest   19,033       27,115       12,809       34,612  
Income tax expense   (5,368 )     (10,586 )     (3,924 )     (12,711 )
Net income   13,665       16,529       8,885       21,901  
Adjust net loss attributable to noncontrolling interest   608       484       1,133       667  
Net income attributable to common stockholders $ 14,273     $ 17,013     $ 10,018     $ 22,568  
Net income attributable to common stockholders per share                              
Basic $ 0.38     $ 0.46     $ 0.27     $ 0.60  
Diluted $ 0.37     $ 0.45     $ 0.26     $ 0.60  
Weighted average shares used in computing per share amounts:                              
Basic   37,692,826       37,211,634       37,562,106       37,334,598  
Diluted   38,999,871       37,408,911       38,559,204       37,574,665  
K12 INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended March 31,
    2016       2015  
  (In thousands)
Cash flows from operating activities      
Net income $ 8,885     $ 21,901  
Adjustments to reconcile net income to net cash provided by operating activities              
Depreciation and amortization expense   50,622       52,273  
Stock-based compensation expense   13,759       13,471  
Excess tax benefit from stock-based compensation   (6 )     (8 )
Deferred income taxes   (552 )     4,128  
Provision for doubtful accounts   2,895       1,442  
Provision for excess and obsolete inventory   543       541  
Benefit for student computer shrinkage and obsolescence   (422 )     (262 )
Expensed leased computer peripherals   2,532        
Changes in assets and liabilities:              
Accounts receivable   (37,521 )     (81,421 )
Inventories   12,882       15,532  
Prepaid expenses   (5,409 )     (4,226 )
Other current assets   79       (3,719 )
Deposits and other assets   (159 )     (425 )
Accounts payable   (14,074 )     (10,979 )
Accrued liabilities   3,483       (1,974 )
Accrued compensation and benefits   110       4,619  
Deferred revenue   25,971       32,336  
Deferred rent and other liabilities   (2,496 )     2,510  
Net cash provided by operating activities   61,122       45,739  
Cash flows from investing activities              
Purchase of property and equipment   (2,458 )     (7,656 )
Capitalized software development costs   (26,321 )     (25,430 )
Capitalized curriculum development costs   (12,206 )     (12,194 )
Investment in LearnBop, Inc.         (6,512 )
Net cash used in investing activities   (40,985 )     (51,792 )
Cash flows from financing activities              
Repayments on capital lease obligations   (13,428 )     (16,743 )
Purchase of treasury stock         (26,452 )
Proceeds from exercise of stock options   14       513  
Excess tax benefit from stock-based compensation   6       8  
Retirement of restricted stock for income tax withholding   (3,056 )     (2,388 )
Net cash used in financing activities   (16,464 )     (45,062 )
Effect of foreign exchange rate changes on cash and cash equivalents   (17 )     (2,144 )
Net change in cash and cash equivalents   3,656       (53,259 )
Cash and cash equivalents, beginning of period   195,852       196,109  
Cash and cash equivalents, end of period $ 199,508     $ 142,850  

Non-GAAP Financial Measures

EBITDA

EBITDA consists of net income plus net interest expense, plus income tax expense, minus income tax benefit, plus depreciation and amortization and non-controlling interest. Interest expense primarily consists of interest expense for capital leases. We use EBITDA in addition to income from operations and net income as a measure of operating performance. However, EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or GAAP, and when analyzing our operating performance, investors should use EBITDA in addition to, and not as an alternative for, net income as determined in accordance with GAAP. Not all companies use identical calculations for EBITDA, therefore our presentation of EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, EBITDA is not intended to be a measure of free cash flow for our management’s discretionary use, as it does not consider certain cash requirements such as capital expenditures, tax payments, interest payments, or other working capital.

We believe EBITDA is useful to an investor in evaluating our operating performance because it is widely used to measure a company’s operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of corporate performance exclusive of our capital structure and the method by which assets were acquired. Our management uses EBITDA:

  • as an additional measurement of operating performance because it assists us in comparing our performance on a consistent basis; and
  • in presentations to the members of our Board of Directors to enable our Board to have the same measurement basis of operating performance as is used by management to compare our current operating results with corresponding prior periods and with the results of other companies in our industry.

The following tables provide a reconciliation of net income to EBITDA:

  Three Months Ended March 31,   Nine Months Ended December 31,
    2016     2015       2016     2015  
    (In thousands)   (In thousands)
Net income — K12 Inc.    $   14,273   $   17,013     $   10,018   $   22,568  
Interest expense (income), net        101       315         596       134  
Income tax expense       5,368       10,586         3,924       12,711  
Depreciation and amortization        17,586       17,764         50,622       52,273  
Noncontrolling interest        (608 )     (484 )       (1,133 )     (667 )
EBITDA    $   36,720   $   45,194     $   64,027   $   87,019  

About K12 Inc.

K12 Inc. (NYSE:LRN) is driving innovation and advancing the quality of education by delivering state-of-the-art, digital learning platforms and technology to students and school districts across the globe. K12’s award winning curriculum serves over 2,000 schools and school districts and has delivered more than four million courses over the past decade. K12 is a company of educators with the nation’s largest network of K-12 online school teachers, providing instruction, academic services, and learning solutions to public schools and districts, traditional classrooms, blended school programs, and directly to families. The K12 program is offered through K12 partner public schools in 33 states and the District of Columbia, and through school districts and public and private schools serving students in all 50 states and more than 100 countries.  More information can be found at K12.com.

K12 Inc.
Investor Contact:
Mike Kraft, 571-353-7778
VP Finance & Corporate Treasurer
mkraft@k12.com

K12 Q2 Adj. Profit Beats Street View

K12 Q2 Adj. Profit Beats Street View

2/4/2014 7:12 AM ET

K12 Inc. (LRN: Quote), a provider of proprietary curriculum and online school programs for students in pre-K through high school, Tuesday reported a loss for the second quarter compared with profit in the same period last year, mainly due to higher costs. After adjusting for certain items, the company reported profit which topped analysts’ estimates.

K12 reported loss of $3.7 million, or $0.09 per share, compared with a profit of $9.5 million, or $0.24 per share, reported for the second quarter last year.

Excluding certain items, the company reported profit of $13.75 million, or $0.36 per share. On average, eight analysts polled by Thomson-Reuters estimated the company’s profit to be $0.32 for the quarter. Analysts’ estimates typically exclude one-time items.

Loss from operations was $8.91 million compared with a profit of $16.27 million in the corresponding period last year.

For the three months to December, EBITDA declined to $25.6 million from $32.5 million a year earlier.

Revenue for the 3-month period rose to $223.92 million from $206.03 million a year earlier. Analysts expected revenue of $223.27 million.Total student enrollments declined 6.1 percent to 4,135 from 4,403 a year ago.

Looking ahead, the company expects third-quarter revenue of $225 million to $235 million, operating income of $23 million to $27 million, and capital expenditures of $15 million to $20 million.

K12 Inc. Reports Second Quarter Fiscal 2014 With Revenue of $223.9 Million – MarketWatch

press release

Feb. 4, 2014, 6:30 a.m. EST

K12 Inc. Reports Second Quarter Fiscal 2014 With Revenue of $223.9 Million

HERNDON, Va., Feb 04, 2014 (GLOBE NEWSWIRE via COMTEX) –K12 Inc. LRN -4.83% , a technology-based education company and leading provider of proprietary curriculum and online school programs for students in pre-K through high school, today announced its results for the second fiscal quarter ended December 31, 2013. Financial measures are provided on a GAAP basis, followed by a summary of results excluding the impact of specific charges which had a significant impact on second quarter results.

Financial Highlights for the Three Months Ended December 31, 2013 (Second Quarter Fiscal Year 2014)

– Revenues for the second quarter of FY 2014 increased 8.7% from the prior year to $223.9 million.

– EBITDA, a non-GAAP measure (see reconciliation below), for the second quarter of FY 2014 was $25.6 million, compared to $32.5 million from the second quarter of FY 2013.

– Operating loss of $8.9 million compared to operating income of $16.3 million in the second quarter of FY 2013.

– Net loss attributable to common stockholders of $3.7 million, compared to net income of $9.5 million from second quarter of FY 2013.

– Diluted net loss attributable to common stockholders per share was $0.09.

During the quarter ended December 31, 2013, the Company incurred the following charges, totaling $32.2 million including $4.4 million in cash charges.

– Additional reserve for excess inventory and accelerated depreciation on software, products and computer hardware of $18.6 million.

– Accelerated amortization of trade names in our Institutional business of $5.2 million.

– Severance costs associated with the departure of Ron Packard, K12’s former CEO, and a modest workforce reduction enacted primarily at K12 headquarters, collectively $7.4 million.

– The Company announced its intent to form a new company which K12 will contribute assets and its partners will contribute cash. Other charges and expenses of $1.0 million included costs related to the formation of this new company.

Excluding the impact of the aforementioned charges, for the three months ended December 31, 2013 (see additional tables below).

EBITDA would have increased to $40.2 million, a 23.7% increase compared to the $32.5 million from the second quarter of FY 2013.

– Operating income would have increased to $23.3 million, a 42.9% increase compared to operating income of $16.3 million in the second quarter of FY 2013.

– Net income attributable to common and Series A stockholders would have increased to $14.3 million, a 50.5% increase compared to net income of $9.5 million in the second quarter of FY 2013.

– Diluted net income attributable to common stockholders per share would have increased to $0.36 as compared to the $0.24 in the prior year.

Financial Highlights for the Six Months Ended December 31, 2013

– Revenues for the six months ended December 31, 2013 increased 5.9% to $452.3 million.

– EBITDA, a non-GAAP measure (see reconciliation below), was $34.1 million, compared to $56.8 million from the first six months of FY 2013.

– Operating loss of $17.4 million compared to operating income of $24.9 million for the first six months of FY 2013.

– Net loss attributable to common and Series A stockholders of $8.7 million, compared to net income of $13.9 million for the first six months of FY 2013.

– Diluted net loss attributable to common stockholders per share was $0.22, which includes the pro rata effect of the Series A Special shares conversion to commons shares on September 3, 2013.

Excluding the impact of the aforementioned charges, for the six months ended December 31, 2013

EBITDA would have been $48.6 million compared to $56.8 million for the first six months of FY 2013.

– Operating income would have been $14.9 million compared to operating income of $24.9 million for the first six months of FY 2013.

– Net income attributable to common and Series A stockholders would have been $9.2 million compared to net income of $13.9 million for the first six months of FY 2013.

– Diluted net income attributable to common stockholders per share would have been $0.24, which includes the pro rata effect of the Series A Special shares conversion to common shares on September 3, 2013.

Comments from Management

“We continue to be focused on our primary mission to provide an individualized and effective educational experience for our students,” said Nate Davis, Chairman and Chief Executive Officer. “This quarter we continued to invest in new content, programs, and infrastructure while improving internal operating efficiency. Our Managed Schools are now in the middle of the school year using many of the new educational programs we put in place this year which we believe will improve educational outcomes for all engaged families,” added Davis.

Cash, Capital Expenditures and Capital Leases

As of December 31, 2013, the Company had cash and cash equivalents of $162.9 million, a decrease of $18.6 million from the $181.5 million reported at June 30, 2013.

Capital expenditures for the six months ended December 31, 2013 were $23.5 million, a decrease of $2.3 million from the prior year’s first six months, and was comprised of:

– $5.3 million for property and equipment,

– $10.6 million for capitalized software development, and

– $7.6 million for capitalized curriculum.

Capital leases financed additional purchases of $17.3 million during the six months ended December 31, 2013, primarily for student computers.

Share Buyback

On November 7, 2013 K12 announced the Board of Directors had authorized the repurchase of up to $75.0 million of the Company’s outstanding common stock. For the three months ended December 31, 2013, the Company repurchased 284,200 shares of its common stock at a weighted average purchase price of $20.72 per share for a total cost of $5.9 million. The Company has $69.1 million remaining available on its share repurchase authorization. Future purchases under this buyback would be dependent upon business and market conditions and other factors.

Revenue and Enrollment Data

Revenue

The following table sets forth the Company’s revenues – Managed Public Schools (turn-key management services provided to public schools), Institutional Sales (educational products and services provided to school districts, public schools and other educational institutions that it does not manage), and International and Private Pay Schools (private schools for which it charges student tuition and makes direct consumer sales) – for the periods indicated:

                                              Three Months Ended December 31, Change 2013 / 2012  Six Months Ended December 31, Change 2013 / 2012        ($ in thousands)                      2013            2012            $         %         2013           2012           $         %        Managed Public Schools                $ 195,265       $ 177,541       $ 17,724  10.0      $ 392,208      $ 365,302      $ 26,906  7.4        Institutional Sales                   16,582          18,089          (1,507)   (8.3)     36,291         40,061         (3,770)   (9.4)        International and Private Pay Schools 12,072          10,398          1,674     16.1      23,786         21,761         2,025     9.3        Total                                 $ 223,919       $ 206,028       $ 17,891  8.7%      $ 452,285      $ 427,124      $ 25,161  5.9%        

Enrollment Data

The following table sets forth average enrollment data for students in Managed Public Schools and total enrollment data for students in the International and Private Pay Schools for the periods indicated. These figures exclude enrollments from classroom pilot programs and consumer programs.

                                              Three Months Ended December 31,                             Six Months Ended December 31,                                              2013           2012           Change         Change %       2013           2012           Change         Change %        Managed Public Schools        Average Student Enrollments *         125,053        119,132        5,921          5.0%           125,927        119,831        6,096          5.1%        International and Private Pay Schools        Total Student Enrollments             4,135          4,403          (268)          (6.1%)         17,419         17,399         20             0.1%        Total Semester Course Enrollments     12,815         12,138         677            5.6%           50,442         48,170         2,272          4.7%        * The Managed Public Schools average student enrollments includes some enrollments for which we may receive no public funding.        

Third Quarter Outlook

The Company is forecasting the following for the third quarter of FY 2014, excluding the impact of closing our agreement to create a new company as announced on January 7, 2014:

– Revenue in the range of $225 million to $235 million.

– Operating income in the range of $23 million to $27 million.

– Capital expenditures, which includes curriculum and software development, computers and infrastructure, of $15 million to $20 million.

Special Note on Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as “anticipates,” “believes,” “estimates,” “continues,” “likely,” “may,” “opportunity,” “potential,” “projects,” “will,” “expects,” “plans,” “intends” and similar expressions to identify forward looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based upon information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, but are not limited to: our potential inability to further develop, maintain and enhance our products and brands; the reduction of per pupil funding amounts at the schools we serve; reputation harm resulting from poor performance or misconduct by operators in any school in our industry and in any school in which we operate; challenges from virtual public school or hybrid school opponents; failure of the schools we serve to comply with regulations resulting in a loss of funding or an obligation to repay funds previously received; discrepancies in interpretation of legislation by regulatory agencies that may lead to payment or funding disputes; termination of our contracts with schools due to a loss of authorizing charter; failure to enter into new contracts or renew existing contracts with schools; risks associated with entering into and executing mergers, acquisitions and joint ventures; failure to successfully integrate mergers, acquisitions and joint ventures; inability to recruit, train and retain quality teachers and employees; uncertainty regarding our ability to protect our proprietary technologies; risks of new, changing and competitive technologies; increased competition in our industry; and other risks and uncertainties associated with our business described in the Company’s filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of February 4, 2014, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

Conference Call

The Company will discuss its second quarter FY2014 financial results during a conference call scheduled for Tuesday, February 4, 2014 at 8:30 a.m. eastern time (ET).

The conference call will be webcast and available on the K web site at www.k12.com through the Investor Relations link. Please access the web site at least 15 minutes prior to the start of the call to register and download and install any necessary software.

To participate in the live call, investors and analysts should dial (866) 318-8615 (domestic) or (617) 399-5134 at 8:15 a.m. (ET). The participant pass code is 35460461. A replay of the call will be available starting on February 4, 2014 at 12:30 p.m., through March 4, 2014, at (888) 286-8010 (domestic) or (617) 801-6888 (international) pass code 32473353. It will also be archived at www.k12.com in the Investor Relations section for 60 days.

Financial Statements

The financial statements set forth below are not the complete set of K12 Inc.’s financial statements for the three months and six months ended December 31, 2013, and are presented below without footnotes. Readers are encouraged to obtain and carefully review K12 Inc.’s Form 10-Q for the quarter ended December 31, 2013, including all financial statements contained therein and the footnotes thereto, filed with the SEC. The Form 10-Q may be retrieved from the SEC’s website at www.sec.gov or from K12 Inc.’s website at www.k12.com.

        K12 INC.        UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS                                                                                                                                                                                                               December 31,            June 30,                                                                                                                                                                                                               2013                    2013                                                                                                                                                                                                               (In thousands, except share and per share data)        ASSETS        Current assets        Cash and cash equivalents                                                                                                                                                                              $ 162,889               $ 181,480        Accounts receivable, net of allowance of $3,082 and $2,560 at December 31, 2013 and June 30, 2013, respectively                                                                                        254,350                 186,459        Inventories, net                                                                                                                                                                                       23,363                  44,395        Current portion of deferred tax asset                                                                                                                                                                  18,571                  11,368        Prepaid expenses                                                                                                                                                                                       9,090                   10,331        Other current assets                                                                                                                                                                                   27,368                  23,916        Total current assets                                                                                                                                                                                   495,631                 457,949        Property and equipment, net                                                                                                                                                                            56,262                  56,142        Capitalized software, net                                                                                                                                                                              42,738                  43,504        Capitalized curriculum development costs, net                                                                                                                                                          61,824                  64,599        Intangible assets, net                                                                                                                                                                                 25,436                  32,139        Goodwill                                                                                                                                                                                               61,571                  61,413        Deposits and other assets                                                                                                                                                                              5,425                   3,150        Total assets                                                                                                                                                                                           $ 748,887               $ 718,896        LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY        Current liabilities        Current portion of capital lease obligations                                                                                                                                                           $ 22,216                $ 19,395        Current portion of note payable                                                                                                                                                                        –                      390        Accounts payable                                                                                                                                                                                       16,538                  21,838        Accrued liabilities                                                                                                                                                                                    14,585                  17,027        Accrued compensation and benefits                                                                                                                                                                      20,541                  21,970        Deferred revenue                                                                                                                                                                                       61,160                  28,567        Total current liabilities                                                                                                                                                                              135,040                 109,187        Capital lease obligations, net of current portion                                                                                                                                                      19,430                  16,107        Deferred rent, net of current portion                                                                                                                                                                  8,796                   8,833        Deferred tax liability                                                                                                                                                                                 33,584                  33,299        Other long-term liabilities                                                                                                                                                                            2,729                   2,512        Total liabilities                                                                                                                                                                                      199,579                 169,938        Commitments and contingencies                                                                                                                                                                          –                      –        Redeemable noncontrolling interest                                                                                                                                                                     15,200                  15,200        Equity:        K12 Inc. stockholders' equity        Common stock, par value $0.0001; 100,000,000 shares authorized; 41,111,074 and 37,440,662 shares issued and 40,826,874 and 37,440,662 outstanding		 at December 31, 2013 and June 30, 2013, respectively 4                       4        Additional paid-in capital                                                                                                                                                                             626,421                 548,390        Series A Special Stock, par value $0.0001; 2,750,000 shares authorized, zero and 2,750,000 issued and outstanding at December 31, 2013 and June 30,		 2013, respectively                                 –                      63,112        Accumulated other comprehensive loss                                                                                                                                                                   (101)                   (294)        Accumulated deficit                                                                                                                                                                                    (89,755)                (81,050)        Treasury stock of 284,200 and zero shares at cost at December 31, 2013 and June 30, 2013, respectively                                                                                                 (5,883)                 –        Total K12 Inc. stockholders' equity                                                                                                                                                                    530,686                 530,162        Noncontrolling interest                                                                                                                                                                                3,422                   3,596        Total equity                                                                                                                                                                                           534,108                 533,758        Total liabilities, redeemable noncontrolling interest and equity                                                                                                                                       $ 748,887               $ 718,896        
                K12 INC.        UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                                                                                                                                         Three Months Ended      Six Months Ended                                                                                                                                                         December 31,            December 31,                                                                                                                                                         2013        2012        2013        2012                                                                                                                                                         (In thousands, except share and per share data)        Revenues                                                                                                                                         $ 223,919   $ 206,028   $ 452,285   $ 427,124        Cost and expenses        Instructional costs and services                                                                                                                 153,672     122,799     286,574     241,446        Selling, administrative, and other operating expenses                                                                                            75,753      61,379      173,996     150,998        Product development expenses                                                                                                                     3,402       5,578       9,086       9,746        Total costs and expenses                                                                                                                         232,827     189,756     469,656     402,190        Income (loss) from operations                                                                                                                    (8,908)     16,272      (17,371)    24,934        Interest expense, net                                                                                                                            (28)        (272)       (112)       (501)        Income (loss) before income tax expense and noncontrolling interest                                                                              (8,936)     16,000      (17,483)    24,433        Income tax (expense) benefit                                                                                                                     4,685       (6,680)     8,135       (10,569)        Net income (loss)                                                                                                                                (4,251)     9,320       (9,348)     13,864        Adjust net loss attributable to noncontrolling interest                                                                                          586         191         643         4        Net income (loss) attributable to common stockholders, including Series A stockholders                                                           $ (3,665)   $ 9,511     $ (8,705)   $ 13,868        Net income (loss) attributable to common stockholders per share, excluding Series A stockholders, through the conversion date September 3, 2013:        Basic and Diluted                                                                                                                                $ (0.09)    $ 0.24      $ (0.22)    $ 0.36        Weighted average shares used in computing per share amounts:        Basic and Diluted                                                                                                                                39,977,228  36,118,519  38,953,671  36,073,885        
                K12 INC.        UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                                 Six Months Ended December 31,                                                                                                 2013                2012                                                                                                 (In thousands)        Cash flows from operating activities        Net income (loss)                                                                        $ (9,348)           $ 13,864        Adjustments to reconcile net income (loss) to net cash provided by operating activities:        Depreciation and amortization expense                                                    51,474              31,894        Stock-based compensation expense                                                         12,210              5,780        Excess tax benefit from stock-based compensation                                         1,216               (2,532)        Deferred income taxes                                                                    (8,134)             9,482        Provision for doubtful accounts                                                          718                 784        Provision for excess and obsolete inventory                                              4,124               200        Provision (benefit) for student computer shrinkage and obsolescence                      (451)               502        Changes in assets and liabilities:        Accounts receivable                                                                      (68,785)            (63,338)        Inventories                                                                              16,908              8,183        Prepaid expenses                                                                         1,257               (8,630)        Other current assets                                                                     (3,508)             (1,402)        Deposits and other assets                                                                (227)               (217)        Accounts payable                                                                         (5,310)             (3,838)        Accrued liabilities                                                                      (2,484)             8,403        Accrued compensation and benefits                                                        (1,435)             (4,058)        Deferred revenue                                                                         32,149              33,529        Release of restricted cash                                                               –                  1,501        Deferred rent and other long term liabilities                                            178                 1,945        Net cash provided by operating activities                                                20,552              32,052        Cash flows from investing activities        Purchase of property and equipment                                                       (5,329)             (4,524)        Capitalized software development costs                                                   (10,632)            (11,633)        Capitalized curriculum development costs                                                 (7,649)             (9,628)        Mortgage note to managed school partner                                                  (2,100)             –        Net cash used in investing activities                                                    (25,710)            (25,785)        Cash flows from financing activities        Repayments on capital lease obligations                                                  (11,145)            (9,851)        Repayments on note payable                                                               (390)               (785)        Proceeds from exercise of stock options                                                  7,617               607        Excess tax benefit from stock-based compensation                                         (1,217)             2,532        Purchase of treasury stock                                                               (5,883)             –        Repurchase of restricted stock for income tax withholding                                (3,223)             (801)        Net cash used in financing activities                                                    (14,241)            (8,298)        Effect of foreign exchange rate changes on cash and cash equivalents                     808                 571        Net change in cash and cash equivalents                                                  (18,591)            (1,460)        Cash and cash equivalents, beginning of period                                           181,480             144,652        Cash and cash equivalents, end of period                                                 $ 162,889           $ 143,192        

Non-GAAP Financial Measures

EBITDA

EBITDA consists of net income (loss), plus net interest expense, plus income tax expense, minus income tax benefit, plus depreciation and amortization and non-controlling interest charges. Interest expense primarily consists of interest expense for capital leases. We use EBITDA in addition to income (loss) from operations and net income (loss) as a measure of operating performance. However, EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or GAAP, and when analyzing our operating performance, investors should use EBITDA in addition to, and not as an alternative for, net income (loss) as determined in accordance with GAAP. Not all companies use identical calculations for EBITDA, therefore our presentation of EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, EBITDA is not intended to be a measure of free cash flow for our management’s discretionary use, as it does not consider certain cash requirements such as capital expenditures, tax payments, interest payments, or other working capital.

We believe EBITDA is useful to an investor in evaluating our operating performance because it is widely used to measure a company’s operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of corporate performance exclusive of our capital structure and the method by which assets were acquired. Our management uses EBITDA:

– as an additional measurement of operating performance because it assists us in comparing our performance on a consistent basis;

– in presentations to the members of our Board of Directors to enable our Board to have the same measurement basis of operating performance as is used by management to compare our current operating results with corresponding prior periods and with the results of other companies in our industry.

The following tables provide a reconciliation of net income (loss) to EBITDA.

                                      Three Months Ended December 31, Six Months Ended December 31,                                      2013            2012            2013           2012                                      (In thousands)                  (In thousands)        Net income (loss)-K12 Inc.    $ (3,665)       $ 9,511         $ (8,705)      $ 13,868        Interest expense, net         28              272             112            501        Income tax expense (benefit)  (4,685)         6,680           (8,135)        10,569        Depreciation and amortization 34,525          16,235          51,474         31,894        Noncontrolling interest       (586)           (191)           (643)          (4)        EBITDA                        $ 25,617        $ 32,507        $ 34,103       $ 56,828        

Additional Information

The following tables are provided as reference only and are related to the aforementioned $32.2 million charges incurred in the second quarter of FY 2014.

                                                                                                                                                         Three Months Ended December 31,                                                                                                                                                         Reported Results Specific Q2 Charges Results Excluding Charges Reported Results Results Excluding Charges                                                                                                                                                         (In thousands, except share and per share data)                (% of Revenue)        Revenues                                                                                                                                         $ 223,919        $ –                $ 223,919                 100.0%           100.0%        Cost and expenses        Instructional costs and services                                                                                                                 153,672          19,238              134,434                   68.6%            60.0%        Selling, administrative, and other operating expenses                                                                                            75,753           13,009              62,744                    33.8%            28.0%        Product development expenses                                                                                                                     3,402            –                  3,402                     1.5%             1.5%        Total costs and expenses                                                                                                                         232,827          32,247              200,580                   104.0%           89.6%        Income (loss) from operations                                                                                                                    (8,908)          (32,247)            23,339                    (4.0%)           10.4%        Interest expense, net                                                                                                                            (28)             –                  (28)                      (0.0%)           (0.0%)        Income (loss) before income tax expense and noncontrolling interest                                                                              (8,936)          (32,247)            23,311                    (4.0%)           10.4%        Income tax (expense) benefit                                                                                                                     4,685            14,243              (9,558)                   2.1%             (4.3%)        Net income (loss)                                                                                                                                (4,251)          (18,004)            13,753                    (1.9%)           6.1%        Adjust net loss attributable to noncontrolling interest                                                                                          586              –                  586                       0.3%             0.3%        Net income (loss) attributable to common stockholders, including Series A stockholders                                                           $ (3,665)        $ (18,004)          $ 14,339                  (1.6%)           6.4%        Net income (loss) attributable to common stockholders per share, excluding Series A stockholders, through the conversion date September 3, 2013:        Basic and Diluted                                                                                                                                $ (0.09)         $ (0.45)            $ 0.36        Weighted average shares used in computing per share amounts:        Basic and Diluted                                                                                                                                39,977,228       39,977,228          39,977,228                                                                                                                                                         Six Months Ended December 31,                                                                                                                                                         Reported Results Specific Q2 Charges Results Excluding Charges Reported Results Results Excluding Charges                                                                                                                                                         (In thousands, except share and per share data)                (% of Revenue)        Revenues                                                                                                                                         $ 452,285        $ –                $ 452,285                 100.0%           100.0%        Cost and expenses        Instructional costs and services                                                                                                                 286,574          19,238              267,336                   63.4%            59.1%        Selling, administrative, and other operating expenses                                                                                            173,996          13,009              160,987                   38.4%            35.6%        Product development expenses                                                                                                                     9,086            –                  9,086                     2.0%             2.0%        Total costs and expenses                                                                                                                         469,656          32,247              437,409                   103.8%           96.7%        Income (loss) from operations                                                                                                                    (17,371)         (32,247)            14,876                    (3.8%)           3.3%        Interest expense, net                                                                                                                            (112)            –                  (112)                     (0.0%)           (0.0%)        Income (loss) before income tax expense and noncontrolling interest                                                                              (17,483)         (32,247)            14,764                    3.8%             3.3%        Income tax (expense) benefit                                                                                                                     8,135            14,336              (6,201)                   1.8%             (1.4%)        Net income (loss)                                                                                                                                (9,348)          (17,911)            8,563                     2.0%             1.9%        Adjust net loss attributable to noncontrolling interest                                                                                          643              –                  643                       0.1%             0.1%        Net income (loss) attributable to common stockholders, including Series A stockholders                                                           $ (8,705)        $ (17,911)          $ 9,206                   (1.9%)           2.0%        Net income (loss) attributable to common stockholders per share, excluding Series A stockholders, through the conversion date September 3, 2013:        Basic and Diluted                                                                                                                                $ (0.22)         $ (0.46)            $ 0.24        Weighted average shares used in computing per share amounts:        Basic and Diluted                                                                                                                                38,953,671       38,953,671          38,953,671        

About K12 Inc.

K12 Inc. LRN -4.83% is leading the transformation to individualized learning as the nation’s foremost provider of technology-powered online solutions for students in pre-kindergarten through high school. K12 has worked with over 2,000 school districts and has delivered more than four million courses over the past decade. K12 provides curricula, academic services, and learning solutions to public schools and districts, traditional classrooms, blended school programs, and families. K12’s curriculum is rooted in decades of research combined with 21st-century technology by cognitive scientists, interactive designers and teachers. K12’s portfolio of more than 550 unique courses and titles–the most extensive in the technology-based education industry–covers every core subject and four academic levels for high school including Honors and AP. K12 offers credit recovery courses, career-building electives, remediation support, six world languages and a deep STEM offering. The K12program is offered through K12partner public schools in approximately two-thirds of the states and the District of Columbia, and through private schools serving students in all 50 states and more than 100 countries. More information can be found at K12.com.

        CONTACT: K12 Inc.                 Investor Contact:                 Mike Kraft, 571-353-7778                 VP Investor Relations                 mkraft@k12.com                 or                 Press Contact:                 Jeff Kwitowski, 703-483-7281                 SVP Corporate Communications                 jkwitowski@k12.com        

http://media.globenewswire.com/cache/28616/small/22912.jpg

http://www.globenewswire.com/newsroom/ti?nf=MTMjMTAwNjY3NzAjMjg2MTY=

(C) Copyright 2014 GlobeNewswire, Inc. All rights reserved.

Suggested Stories

Video »

What’s Behind Hollywood’s Film Exodus?

Super Bowl: Coca-Cola Ad

Super Bowl 2014: Doritos Cowboy Ad

Stuck at the Airport? Go With a Private Jet

What’s Behind Hollywood’s Film Exodus?

Super Bowl: Coca-Cola Ad

Super Bowl 2014: Doritos Cowboy Ad

Stuck at the Airport? Go With a Private Jet

    K12 Inc. Reports First Quarter Fiscal 2014 Results

    Q1 Consistent with Recent Guidance

    Board Authorizes $75 Million Stock Buyback

    HERNDON, Va., Nov. 7, 2013 (GLOBE NEWSWIRE) – K12 Inc. (NYSE:LRN), a leading provider of proprietary, technology-based curriculum, software and education services created for individualized learning for students primarily in kindergarten through 12th grade, today announced its results for the first fiscal quarter ended September 30, 2013.

    Financial Highlights for the Three Months Ended September 30, 2013 (First Quarter Fiscal Year 2014)

       – Revenues for the first quarter of FY 2014 increased 3.3% to $228.4       million.    – Revenues in Q1 were reduced by $4.5 million as a result of changes in       certain contract agreements. The revenue has been deferred to the       remainder of the current fiscal year.     – Institutional Sales were lower on market pressure for some of our product       lines.    – EBITDA, a non-GAAP measure (see reconciliation below), for the first       quarter of FY 2014 was $8.5 million, compared to $24.3 million from the       first quarter of FY2013.     – Operating loss of $8.5 million compared to operating income of $8.7       million in the first quarter of FY 2013.     – EBITDA and the operating loss in Q1 were negatively impacted by deferral       of revenue mentioned above along with higher seasonal selling,       administrative and operating expenses in anticipation of stronger       enrollments.     – Net loss attributable to common and Series A stockholders of $5.0 million,       compared to net income of $4.4 million from first quarter of FY 2013.     – Diluted net loss attributable to common stockholders per share was $0.13,       which includes the pro rata effect of the Series A Special shares       conversion to common shares on September 3, 2013. 

    Stock Buyback

    The Board of Directors has authorized the repurchase of up to $75 million of the Company’s outstanding common stock. Any purchases under this buyback would be dependent upon business and market conditions and other factors. The stock purchases may be made from time to time and may be made through a variety of methods including open market purchases and 10b5-1 plans.

    Comments from Management

    “We are clearly disappointed by our first quarter enrollment and revenue results and the operating issues that hampered growth. However, demand for our services remains strong and I am encouraged by the early indicators that our new programs will make a positive difference in student academic outcomes,” said Nate Davis, Executive Chairman of the Board. “The authorization of a stock buyback underscores the Board’s continuing confidence in the company’s capacity for further growth and creation of shareholder value,” added Davis.

    Cash, Capital Expenditures and Capital Leases

    As of September 30, 2013, the Company had cash and cash equivalents of $163.5 million, a decrease of $18.0 million or 9.9% from June 30, 2013. Cash and cash equivalents decreased $36.7 million, or 25.4%, from June 30, 2012 to September 30, 2012.

    Capital expenditures for the quarter ended September 30, 2013 were $12.6 million, a decrease of $2.6 million from the prior year’s first quarter, and was comprised of:

       – $4.3 million for property and equipment,     – $5.0 million for capitalized software development, and     – $3.3 million for capitalized curriculum. 

    Capital leases financed additional purchases of $10.7 million during the quarter ended September 30, 2013, primarily for student computers.

    Revenue and Enrollment Data

    Revenue

    The following table sets forth the Company’s revenues – Managed Public Schools (turn-key management services provided to public schools), Institutional Sales (educational products and services provided to school districts, public schools and other educational institutions that it does not manage), and International and Private Pay Schools (private schools for which it charges student tuition and makes direct consumer sales) – for the periods indicated:

                                            Three Months Ended         Change                                          September 30,          2013 / 2012                                      ———————-  —————– ($ in thousands)                        2013        2012        $         %                                      ———-  ———-  ——–  ——- Managed Public Schools                $ 196,944   $ 187,761   $ 9,183     4.9% Institutional Sales                      19,709      21,972   (2,263)   (10.3) International and Private Pay  Schools                                 11,713      11,363       350      3.1                                      ———-  ———-  ——–  ——- Total                                 $ 228,366   $ 221,096   $ 7,270     3.3%                                      ==========  ==========  ========  =======  

    Enrollment Data

    The following table sets forth average enrollment data for students in Managed Public Schools and total enrollment data for students in the International and Private Pay Schools for the periods indicated. These figures exclude enrollments from classroom pilot programs and consumer programs.

                              Three Months Ended September 30,      2013 / 2012                         ———————————-  ——————                                     2013              2012   Change   Change %                         —————-  —————-  ——-  ———  Managed Public Schools   Average Student    Enrollments *                 128,550           121,665    6,885       5.7% International and Private Pay Schools   Total Student    Enrollments                    13,284            12,996      288       2.2%   Total Semester    Course Enrollments             37,627            36,032    1,595       4.4%  

    * The Managed Public Schools average student enrollments include enrollments for which we receive no public funding. Q1 average student enrollments are equal to the official count date number, which is the first Wednesday of October in a year.

    Second Quarter 2014 Outlook

    The Company is forecasting the following for the second quarter of FY 2014:

       – Revenue in the range of $218 million to $228 million.     – Operating income in the range of $18 million to $22 million.     – Capital expenditures of $15 million to $20 million. 

    Special Note on Forward-Looking Statements

    This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as “anticipates,” “believes,” “estimates,” “continues,” “likely,” “may,” “opportunity,” “potential,” “projects,” “will,” “expects,” “plans,” “intends” and similar expressions to identify forward looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based upon information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, but are not limited to: our potential inability to further develop, maintain and enhance our products and brands; the reduction of per pupil funding amounts at the schools we serve; reputation harm resulting from poor performance or misconduct by operators in any school in our industry and in any school in which we operate; challenges from virtual public school or hybrid school opponents; failure of the schools we serve to comply with regulations resulting in a loss of funding or an obligation to repay funds previously received; discrepancies in interpretation of legislation by regulatory agencies that may lead to payment or funding disputes; termination of our contracts with schools due to a loss of authorizing charter; failure to enter into new contracts or renew existing contracts with schools; risks associated with entering into and executing mergers, acquisitions and joint ventures; failure to successfully integrate mergers, acquisitions and joint ventures; inability to recruit, train and retain quality teachers and employees; uncertainty regarding our ability to protect our proprietary technologies; risks of new, changing and competitive technologies; increased competition in our industry; and other risks and uncertainties associated with our business described in the Company’s filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of November 7, 2013, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

    Conference Call

    The Company will discuss its first quarter FY2014 financial results during a conference call scheduled for Thursday, November 7, 2013 at 8:30 a.m. eastern time (ET).

    The conference call will be webcast and available on the K(12) web site at www.k12.com through the Investor Relations link. Please access the web site at least 15 minutes prior to the start of the call to register and download and install any necessary software.

    To participate in the live call, investors and analysts should dial (877) 546-5021 (domestic) or (857) 244-7553 at 8:15 a.m. (ET). The participant pass code is 27374131. A replay of the call will be available starting on November 7, 2013 at 12:00 p.m., through December 7, 2013, at (888) 286-8010 (domestic) or (617) 801-6888 (international) pass code 87356593. It will also be archived at www.k12.com in the Investor Relations section for 60 days.

    Financial Statements

    The financial statements set forth below are not the complete set of K12 Inc.’s financial statements for the quarter and are presented below without footnotes. Readers are encouraged to obtain and carefully review K12 Inc.’s Form 10-Q for the quarter ended September 30, 2013, including all financial statements contained therein and the footnotes thereto, filed with the SEC. The Form 10-Q may be retrieved from the SEC’s website at www.sec.gov or from K12 Inc.’s website at www.k12.com.

                                         K12 INC.                UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS                                       September 30,              June 30,                                          2013                     2013                               —————————  ——————-                               (In thousands, except share and per share data)            ASSETS Current assets   Cash and cash equivalents                     $ 163,474            $ 181,480   Accounts receivable, net    of allowance of $2,645    and $2,560 at September    30, 2013 and June 30,    2013, respectively                             271,808              186,459   Inventories, net                                 28,013               44,395   Current portion of    deferred tax asset                              21,478               11,368   Prepaid expenses                                 11,206               10,331   Other current assets                             32,385               23,916                               —————————  ——————-    Total current assets                           528,364              457,949 Property and equipment, net                        62,892               56,142 Capitalized software, net                          44,782               43,504 Capitalized curriculum  development costs, net                            63,989               64,599 Intangible assets, net                             31,332               32,139 Goodwill                                           61,523               61,413 Deposits and other assets                           5,415                3,150                               —————————  ——————-    Total assets                                 $ 798,297            $ 718,896                               ===========================  ===================   LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND            EQUITY Current liabilities   Current portion of capital    lease obligations                             $ 21,664             $ 19,395   Current portion of note    payable                                             –                  390   Accounts payable                                 50,617               21,838   Accrued liabilities                              15,702               17,027   Accrued compensation and    benefits                                        12,063               21,970   Deferred revenue                                 74,549               28,567                               —————————  ——————-    Total current liabilities                      174,595              109,187 Capital lease obligations,  net of current portion                            18,981               16,107 Deferred rent, net of  current portion                                    8,920                8,833 Deferred tax liability                             39,575               33,299 Other long-term liabilities                         2,598                2,512                               —————————  ——————-   Total liabilities                               244,669              169,938                               —————————  ——————- Commitments and contingencies                                          –                   – Redeemable noncontrolling  interest                                          15,200               15,200                               —————————  ——————- Equity: K12 Inc. stockholders' equity Common stock, par value  $0.0001; 100,000,000 shares  authorized; 41,143,988 and  37,440,662 shares issued  and outstanding at  September 30, 2013 and June  30, 2013, respectively                                 4                    4 Additional paid-in capital                        621,254              548,390 Series A Special Stock, par  value $0.0001; 2,750,000  authorized; zero and  2,750,000 shares issued and  outstanding at September  30, 2013 and June 30, 2013,  respectively                                          –               63,112 Accumulated other  comprehensive loss                                 (189)                (294) Accumulated deficit                              (86,090)             (81,050)                               —————————  ——————- Total K12 Inc. stockholders'  equity                                           534,979              530,162 Noncontrolling interest                             3,449                3,596                               —————————  ——————- Total equity                                      538,428              533,758                               —————————  ——————- Total liabilities,  redeemable noncontrolling  interest and equity                            $ 798,297            $ 718,896                               ===========================  ===================                                        K12 INC.           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                       Three Months Ended September 30,                              ————————————————-                                        2013                     2012                              ————————  ———————–                               (In thousands, except share and per share data) Revenues                                    $ 228,366                $ 221,096                              ————————  ———————– Cost and expenses   Instructional costs and    services                                   132,902                  118,648   Selling, administrative,    and other operating    expenses                                    98,244                   89,619   Product development    expenses                                     5,684                    4,168                              ————————  ———————– Total costs and expenses                      236,830                  212,435                              ————————  ———————– Income (loss) from  operations                                   (8,464)                    8,661 Interest expense, net                            (84)                    (228)                              ————————  ———————– Income (loss) before income  tax expense and  noncontrolling interest                      (8,548)                    8,433 Income tax (expense)  benefit                                        3,450                  (3,889)                              ————————  ———————– Net income (loss)                             (5,098)                    4,544 Adjust net (income) loss  attributable to  noncontrolling interest                           58                    (187)                              ————————  ———————– Net income (loss)  attributable to common  stockholders, including  Series A stockholders                      $ (5,040)                  $ 4,357                              ========================  ======================= Net income (loss) attributable to common stockholders per share, excluding Series A stockholders through the conversion date September 3, 2013:   Basic and Diluted                          $ (0.13)                   $ 0.11                              ========================  ======================= Weighted average shares used in computing per share amounts:   Basic and Diluted                        37,868,928               36,029,252                              ========================  =======================                                        K12 INC.              UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH                                      FLOWS                                               Three Months Ended September 30,                                             ———————————-                                                         2013              2012                                             —————-  —————-                                                       (In thousands) Cash flows from operating activities Net income (loss)                                  $ (5,098)           $ 4,544 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization expense                 16,950            15,661 Stock-based compensation expense                       3,680             2,872 Excess tax benefit from stock-based  compensation                                          (385)           (1,086) Deferred income taxes                                (3,450)             3,488 
    Provision for doubtful accounts                          302               397 Provision for inventory obsolescence                       8                42 Provision (benefit) for student computer  shrinkage and obsolescence                            (260)               373 Changes in assets and liabilities:   Accounts receivable                               (85,659)          (98,297)   Inventories                                         16,374             9,699   Prepaid expenses                                     (861)           (3,431)   Other current assets                               (8,524)           (5,842)   Deposits and other assets                            (220)               299   Accounts payable                                    28,773             9,419   Accrued liabilities                                (1,353)             2,368   Accrued compensation and benefits                  (9,907)           (5,134)   Deferred revenue                                    45,542            44,308   Release of restricted cash                              –             1,501   Deferred rent                                          175             1,605                                             —————-  —————- Net cash used in operating activities                (3,913)          (17,214)                                             —————-  —————- Cash flows from investing activities   Purchase of property and equipment                 (4,274)           (3,863)   Capitalized software development costs             (5,006)           (6,289)   Capitalized curriculum development costs           (3,322)           (5,092)   Mortgage note to managed school partner            (2,100)                –                                             —————-  —————- Net cash used in investing activities               (14,702)          (15,244)                                             —————-  —————- Cash flows from financing activities   Repayments on capital lease obligations            (5,556)           (4,622)   Repayments on note payable                           (390)             (380)   Proceeds from exercise of stock options              7,106                56   Excess tax benefit from stock-based    compensation                                          385             1,086   Repurchase of restricted stock for    income tax withholding                            (1,508)             (645)                                             —————-  —————- Net cash provided by (used in) financing  activities                                               37           (4,505)                                             —————-  —————- Effect of foreign exchange rate changes on  cash and cash equivalents                               572               249                                             —————-  —————- Net change in cash and cash equivalents             (18,006)          (36,714) Cash and cash equivalents, beginning of  period                                              181,480           144,652                                             —————-  —————- Cash and cash equivalents, end of period           $ 163,474         $ 107,938                                             ================  ================  

    Non-GAAP Financial Measures

    EBITDA

    EBITDA consists of net income (loss), plus net interest expense, plus income tax expense, minus income tax benefit, plus depreciation and amortization and non-controlling interest charges. Interest expense primarily consists of interest expense for capital leases and long-term and short-term borrowings. We use EBITDA in addition to income (loss) from operations and net income (loss) as a measure of operating performance. However, EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or GAAP, and when analyzing our operating performance, investors should use EBITDA in addition to, and not as an alternative for, net income (loss) as determined in accordance with GAAP. Because not all companies use identical calculations, our presentation of EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, EBITDA is not intended to be a measure of free cash flow for our management’s discretionary use, as it does not consider certain cash requirements such as capital expenditures, tax payments, interest payments, or other working capital.

    We believe EBITDA is useful to an investor in evaluating our operating performance because it is widely used to measure a company’s operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of corporate performance exclusive of our capital structure and the method by which assets were acquired. Our management uses EBITDA:

       – as an additional measurement of operating performance because it assists       us in comparing our performance on a consistent basis;     – in presentations to the members of our Board of Directors to enable our       Board to have the same measurement basis of operating performance as is       used by management to compare our current operating results with       corresponding prior periods and with the results of other companies in       our industry; and on an adjusted basis in determining compliance with the       terms of our credit agreement. 

    The following tables provide a reconciliation of net income (loss) to EBITDA.

                                      Three Months Ended September 30,                                 ———————————-                                       2013              2012                                 —————–  —————                                           (In thousands) Net income (loss) – K12 Inc.           $ (5,040)          $ 4,357 Interest expense, net                          84              228 Income tax expense (benefit)              (3,450)            3,889 Depreciation and amortization              16,950           15,661 Noncontrolling interest                      (58)              187                                 —————–  ————— EBITDA                                    $ 8,486         $ 24,322                                 =================  ===============  

    About K12 Inc.

    K12 Inc. (NYSE:LRN) is leading the transformation to individualized learning as the nation’s foremost provider of technology-powered online solutions for students in pre-kindergarten through high school. K12 has worked with over 2,000 school districts and has delivered more than four million courses over the past decade. K12 provides curricula, academic services, and learning solutions to public schools and districts, traditional classrooms, blended school programs, and families. K12’s curriculum is rooted in decades of research combined with 21st-century technology by cognitive scientists, interactive designers and teachers. K12’s portfolio of more than 550 unique courses and titles–the most extensive in the technology-based education industry–covers every core subject and four academic levels for high school including Honors and AP. K12 offers credit recovery courses, career-building electives, remediation support, six world languages and a deep STEM offering. The K12 program is offered through K12 partner public schools in approximately two-thirds of the states and the District of Columbia, and through private schools serving students in all 50 states and more than 100 countries. More information can be found at K12.com.

    CONTACT: K12 Inc.          Investor Contact:          Mike Kraft, 571-353-7778          VP Investor Relations          mkraft@k12.com          or          Press Contact:          Jeff Kwitowski, 703-483-7281          SVP Corporate Communications          jkwitowski@k12.com 

    press release

    Aug. 29, 2013, 6:00 a.m. EDT

    K12 Inc. Reports Full Fiscal Year 2013 Financial Results

    EPS Increases 60.0% to $0.72 on Revenue Growth of Nearly 20.0% to $848.2 Million

    http://thetruthaboutk12.com//wp-content/uploads/2015/09/

    http://thetruthaboutk12.com//wp-content/uploads/2015/09/

    HERNDON, Va., Aug 29, 2013 (BUSINESS WIRE) –K12 Inc. LRN +2.14% , a leading provider of proprietary, technology-based curriculum, software and education services created for individualized learning for students primarily in kindergarten through 12th grade, today announced its results for the fourth fiscal quarter and full fiscal year ended June 30, 2013.

    Financial Highlights for the Fiscal Year Ended June 30, 2013

    – Revenues for the fiscal year ended June 30, 2013 grew 19.7% to $848.2 million, primarily due to a 12.7% increase in average student enrollments and an increase in average revenue per student in our managed public schools business.

    – EBITDA, a non-GAAP measure (see reconciliation below), for the fiscal year ended June 30, 2013 increased 28.0% to $111.4 million and EBITDA margin grew to 13.1%.

    – Operating income grew 57.6% to $45.7 million.

    – Net income attributable to common and Series A stockholders grew by 60.6% to $28.1 million.

    – Diluted net income attributable to common stockholders per share, which reflects a pro rata allocation of net income to Series A stockholders, grew 60.0% to $0.72.

    Financial Highlights for the Three Months Ended June 30, 2013 (Fourth Quarter Fiscal Year 2013)

    – Revenues for the fourth quarter of FY 2013 increased 19.2% to $203.1 million, primarily due to organic revenue growth of 20.8% in our core Managed Public Schools business.

    – EBITDA, a non-GAAP measure (see reconciliation below), for the fourth quarter of FY 2013 grew 7.3% to $19.0 million.

    – Operating income decreased 30.0% to $1.4 million.

    – Net income attributable to common and Series A stockholders grew by 27.8% to $2.3 million.

    – Diluted net income attributable to common stockholders per share, which reflects a pro rata allocation of net income to Series A stockholders, grew by 20.0% to $0.06.

    Comments from Management

    Nate Davis, Executive Chairman of the Board, commented: “I am very pleased with the financial results K12 delivered in fiscal 2013. We remain intensely focused on improving academics and, to that end, we have introduced innovative academic pilots to improve our learning model and have launched new diagnostic assessment tools. We are excited about the new school year and grateful to have the opportunity to offer an individualized and adaptive education to students around the world.”

    Cash, Capital Expenditures and Capital Leases

    As of June 30, 2013, the Company had cash and cash equivalents of $181.5 million, reflecting an increase of $36.8 million from June 30, 2012.

    Capital expenditures for the fiscal year ended June 30, 2013 were $50.3 million, reflecting an increase of $1.7 million, and was comprised of:

    – $8.3 million for property and equipment,

    – $23.4 million for capitalized software development, and

    – $18.6 million for capitalized curriculum.

    Capital leases financed additional purchases of $24.7 million during the fiscal year ended June 30, 2013, primarily for computers and software for students.

    Revenue and Enrollment Data

    Revenue by Business Line

    The following table sets forth revenue for the Company’s three lines of business – Managed Public Schools (turn-key management services provided to public schools), Institutional Sales (educational products and services provided to school districts, public schools and other educational institutions that it does not manage), and International and Private Pay Schools (private schools for which it charges student tuition and makes direct consumer sales) – for the periods indicated:

                                                                                                                                                                                                                                                                                                                                                             Year Ended June 30,                                                                                                     2013 / 2012                                                                              2012 / 2011                                                                    ————————————————————————————————————————-                             ——————————————————-                          ———————————————————————–        ($ in thousands)                                                        2013                           2012                                              2011                                             Change               Change %                                 Change                       Change %        ————————————–                      —————————                       —————————                       —————————                       —————————                       ——–                       —————————                       ————————        Managed Public Schools                                                         $ 730,800                                         $ 596,142                                         $ 454,001                                         $ 134,658                      22.6 %                                            $ 142,141                      31.3 %        Institutional Business                                                            73,269                                            73,150                                            46,756                                               119                       0.2 %                                               26,394                      56.5 %        International and Private Pay Business                         44,151                         39,115                         21,677                          5,036                      12.9 %                            17,438                      80.4 %                                                                    ——————– ——-                      ——————– ——-                      ——————– ——-                      ——————– ——-                                                     ——————– ——-        Total                                                                          $ 848,220                                         $ 708,407                                         $ 522,434                                         $ 139,813                      19.7 %                                            $ 185,973                      35.6 %                                                                    ==================== =======                      ==================== =======                      ==================== =======                      ==================== =======                                                     ==================== =======                                                                                                                                                                                                                                                                                                                                                                           

    Enrollment Data

    The following table sets forth average enrollment data for students in Managed Public Schools and total enrollment data for students in the International and Private Pay Schools for the periods indicated. These figures exclude enrollments from classroom pilot programs and consumer programs.

                                                                                                                                                                                                                                          Year Ended June 30,                                                            2013 / 2012                                                       2012 / 2011                                                          —————————————————————–                     ——————————————                     ————————————————-                                                            2013      2012     2011                         Change      Change %                      Change         Change %                                                          ——-                      ——-                      ——                      ———                       ——–                       ——                      ——————-        Average Student Enrollments*                      117,563                      104,289                      74,755                      13,274                          12.7 %                         29,534                            39.5 %                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         Year Ended June 30,                                                            2013 / 2012                                                       2012 / 2011                                                          —————————————————————–                     ——————————————                     ————————————————-                                                            2013                         2012                        2011                         Change                         Change %                      Change                            Change %                                                          ——-                      ——-                      ——                      ———                       ——–                       ——                      ——————-        Student Enrollments                                31,619                       31,830                      28,777                        (211)                        -0.7 %                          3,053                            10.6 %        Semester Course Enrollments                        84,642                       83,519                      68,230                       1,123                           1.3 %                         15,289                            22.4 %                                                                                                                                                                                                                                                    * The Managed Public Schools average student enrollments include        enrollments for which we received no public funding.                 

    Fiscal Year 2014 Outlook

    The Company intends to issue guidance for the current fiscal year in mid-October 2013.

    Special Note on Forward-Looking Statements

    This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as “anticipates,” “believes,” “estimates,” “continues,” “likely,” “may,” “opportunity,” “potential,” “projects,” “will,” “expects,” “plans,” “intends” and similar expressions to identify forward looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based upon information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, but are not limited to: our potential inability to further develop, maintain and enhance our products and brands; the reduction of per pupil funding amounts at the schools we serve; reputation harm resulting from poor performance or misconduct by operators in any school in our industry and in any school in which we operate; challenges from virtual public school or hybrid school opponents; failure of the schools we serve to comply with regulations resulting in a loss of funding or an obligation to repay funds previously received; discrepancies in interpretation of legislation by regulatory agencies that may lead to payment or funding disputes; termination of our contracts with schools due to a loss of authorizing charter; failure to enter into new contracts or renew existing contracts with schools; risks associated with entering into and executing mergers, acquisitions and joint ventures; failure to successfully integrate mergers, acquisitions and joint ventures; inability to recruit, train and retain quality teachers and employees; uncertainty regarding our ability to protect our proprietary technologies; risks of new, changing and competitive technologies; increased competition in our industry; and other risks and uncertainties associated with our business described in the Company’s filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of August 29, 2013, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

    Conference Call

    The Company will discuss its fourth quarter 2013 financial results during a conference call scheduled for Thursday, August 29, 2013 at 8:30 a.m. eastern time (ET).

    The conference call will be webcast and available on the K(12) web site at www.k12.com through the Investor Relations link. Please access the web site at least 15 minutes prior to the start of the call to register and download and install any necessary software.

    To participate in the live call, investors and analysts should dial (866) 825-1709 (domestic) or (617) 213-8060 at 8:20 a.m. (ET). The participant pass code is 82179632. A replay of the call will be available starting on August 29, 2013, through September 5, 2013, at (888) 286-8010 (domestic) or (617) 801-6888 (international) pass code 35861153. It will also be archived at www.k12.com in the Investor Relations section for 60 days.

    Financial Statements

    The financial statements set forth below are not the complete set of K12 Inc.’s financial statements for the quarter and year and are presented below without footnotes. Readers are encouraged to obtain and carefully review K12 Inc.’s Annual Report on Form 10-K for the year ended June 30, 2013, including all financial statements contained therein and the footnotes thereto, filed with the SEC. The Form 10-K may be retrieved from the SEC’s website at www.sec.gov or from K12 Inc.’s website at www.k12.com.

                                                                                                                                                                                                                                                     K12 INC.                                                                                                     CONSOLIDATED BALANCE SHEETS                                                                                                                                                                                                                                                                                                                                       June 30,                                                                                                   ————————————————————————————————————————–                                                                                                                          2013                                                                   2012                                                                                                                        ——-                                                                ——–                                                                                                                                         (In thousands, except share and per share data)                                        ASSETS        Current assets           Cash and cash equivalents                                                                                  $ 181,480                                                              $  144,652           Restricted cash and cash equivalents                                                                               -                                                                   1,501                                                                                                                        186,459                                                                 160,922           Accounts receivable, net of allowance of $2,560 and $1,624 at June           30, 2013 and June 30, 2012, respectively           Inventories, net                                                                                              44,395                                                                  37,853           Current portion of deferred tax asset                                                                         11,368                                                                  16,140           Prepaid expenses                                                                                              10,331                                                                  11,173           Other current assets                                                                       23,916                            14,598                                                                                                   ——————– ——- ——————–                      ——————– ——– ——————–              Total current assets                                                                                      457,949                                                                 386,839        Property and equipment, net                                                                                      56,142                                                                  55,903        Capitalized software, net                                                                                        43,504                                                                  34,709        Capitalized curriculum development costs, net                                                                    64,599                                                                  60,345        Intangible assets, net                                                                                           32,139                                                                  36,736        Goodwill                                                                                                         61,413                                                                  61,619        Investment in Web International                                                                                       -                                                                  10,000        Deposits and other assets                                                                      3,150                             2,684                                                                                                   ——————– ——- ——————–                      ——————– ——– ——————–              Total assets                                                                                            $ 718,896                                           $  648,835                                                                                                   ==================== ======= ====================                      ==================== ======== ====================                                                                                                                                                                                         LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY        Current liabilities           Accounts payable                                                                                           $  21,838                                                              $   23,951           Accrued liabilities                                                                                           17,027                                                                  13,802           Accrued compensation and benefits                                                                             21,970                                                                  17,355           Deferred revenue                                                                                              28,567                                                                  25,410           Current portion of capital lease obligations                                                                  19,395                                                                  15,950           Current portion of note payable                                                               390                             1,145                                                                                                   ——————– ——- ——————–                      ——————– ——– ——————–              Total current liabilities                                                                                 109,187                                                                  97,613        Deferred rent, net of current portion                                                                             8,833                                                                   6,974        Capital lease obligations, net of current portion                                                                16,107                                                                  15,124        Note payable, net of current portion                                                                                  -                                                                     777        Deferred tax liability                                                                                           33,299                                                                  31,591        Other long term liabilities                                                                    2,512                             1,908                                                                                                   ——————– ——- ——————–                      ——————– ——– ——————–           Total liabilities                                                                         169,938                           153,987                                                                                                   ——————– ——- ——————–                      ——————– ——– ——————–        Commitments and contingencies                                                                                         -                                                                       -        Redeemable noncontrolling interest                                                            15,200                            17,200                                                                                                   ——————– ——- ——————–                      ——————– ——– ——————–        Equity:        K12 Inc. stockholders' equity        Common stock, par value $0.0001; 100,000,000 shares authorized;                                                       4                                                                       4        37,440,662 and 36,436,933 shares issued and outstanding at June        30, 2013 and June 30, 2012, respectively        Additional paid-in capital                                                                                      548,390                                                                 519,439        Series A Special Stock, par value $0.0001; 2,750,000 shares issued                                               63,112                                                                  63,112        and outstanding at June 30, 2013 and 2012        Accumulated Other Comprehensive Income (Loss)                                                                      (294)                                                                   100        Accumulated deficit                                                                          (81,050)                                           (109,161)                                                                                                   ——————– ——- ——————–                      ——————– ——– ——————–        Total K12 Inc. stockholders' equity                                                  530,162                                                                 473,494        Noncontrolling interest                                                                        3,596                             4,154                                                                                                   ——————– ——- ——————–                      ——————– ——– ——————–        Total equity                                                                                 533,758                           477,648                                                                                                   ——————– ——- ——————–                      ——————– ——– ——————–        Total liabilities, redeemable noncontrolling interest and equity                                              $ 718,896                                           $  648,835                                                                                                   ==================== ======= ====================                      ==================== ======== ====================        
                                                                                                                                                                                                     K12 INC.                                                                                                                                                                          CONSOLIDATED STATEMENTS OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                               Three Months Ended June 30,                                                                                                                             Year Ended June 30,                                                                                              ——————————————————————————————————————————-                     ——————————————————————————————————————————-                                                                                                   2013                                2012                                2013                                2012                                                                                                   ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–                                                                                                                                                                                                                (In thousands, except share and per share data)        Revenues                                                                                                 $    203,087                                           $    170,402                                           $    848,220                                           $    708,407                                                                                              ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–        Cost and expenses           Instructional costs and services                                                                           129,192                                                                   102,617                                                                   498,398                                                                   408,560           Selling, administrative and other operating expenses                                                        66,206                                                                    60,970                                                                   283,032                                                                   245,274           Product development expenses                                                              6,268                               4,783                              21,084                              25,593                                                                                              ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–        Total costs and expenses                                                                   201,666                             168,370                             802,514                             679,427                                                                                              ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–        Income from operations                                                                                          1,421                                                                     2,032                                                                    45,706                                                                    28,980        Interest income (expense), net                                                               1,657                                (267)                                                  851                                (989)                                                                                              ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–        Income before income tax expense and noncontrolling interest                                                    3,078                                                                     1,765                                                                    46,557                                                                    27,991        Income tax expense                                                                          (1,828)                                                 (571)                                              (20,023)                                              (11,882)                                                                                              ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–        Net income                                                                                                      1,250                                                                     1,194                                                                    26,534                                                                    16,109        Add net loss attributable to noncontrolling interest                                         1,018                                 607                               1,577                               1,434                                                                                              ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–                      ——————– ———- ——————–                                                                                                                                                                                                                                                                                                                                                                     Net income attributable to common stockholders, including Series                                         $      2,268                                           $      1,801                                           $     28,111                                           $     17,543        A stockholders                                                                                              ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                                                                                                                                                                                                                                                                                                                                     Net income attributable to common stockholders per share,        excluding Series A stockholders:           Basic                                                                                                 $       0.06                                           $       0.05                                           $       0.72                                           $       0.46                                                                                              ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================           Diluted                                                                                               $       0.06                                           $       0.05                                           $       0.72                                           $       0.45                                                                                              ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================        Weighted average shares used in computing per share amounts:           Basic                                                                                36,642,685                          35,952,162                          36,267,345                          35,802,678                                                                                              ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================           Diluted                                                                              39,475,382                          38,723,316                          39,017,345                          38,740,863                                                                                              ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================        
                                                                                                                                                                                                                                                                                                                                                   K12 INC.                                                                                                                               CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                                                                                                                                                                                                                                                                                                                                                            Year Ended June 30,                                                                                           ————————————————————————————————————————————————-		———————————————–                                                                                                                  2013                                                2012                                                                   2011                                                                                                                ——-                                                                ——-                                                                ——-                                                                                                                                                (In thousands)        Cash flows from operating activities        Net income                                                                                            $  26,534                                                              $  16,109                                                              $  11,665        Adjustments to reconcile net income to net cash provided by        operating activities:        Depreciation and amortization expense                                                                    65,737                                                                 58,033                                                                 42,934        Stock based compensation expense                                                                         14,374                                                                 10,067                                                                  9,466        Excess tax (benefit) expense from stock based compensation                                               (8,889)                                                                3,122                                                                 (4,954)        Deferred income taxes                                                                                    15,770                                                                 10,297                                                                 10,978        Provision for doubtful accounts                                                                           2,070                                                                    204                                                                  1,472        Provision for inventory obsolescence                                                                        387                                                                  1,618                                                                  1,060        Provision for student computer shrinkage and obsolescence                                                   482                                                                  1,038                                                                    219        Changes in assets and liabilities:           Accounts receivable                                                                                  (27,708)                                                              (64,270)                                                              (15,810)           Inventories                                                                                           (6,929)                                                               (8,918)                                                               (4,621)           Prepaid expenses                                                                                         843                                                                   (784)                                                                  363           Other current assets                                                                                     682                                                                 (5,260)                                                               (1,825)           Deposits and other assets                                                                               (466)                                                                  764                                                                 (1,037)           Accounts payable                                                                                      (2,115)                                                                2,794                                                                  2,726           Accrued liabilities                                                                                    3,226                                                                   (292)                                                                  615           Accrued compensation and benefits                                                                      4,616                                                                  4,275                                                                  1,976           Deferred revenue                                                                                       3,119                                                                  3,351                                                                  6,760           Restricted cash                                                                                        1,501                                                                      -                                                                  1,842           Deferred rent and other liabilities                                                 2,059                              843                            3,384                                                                                           ——————– ——- ——————–                      ——————– ——- ——————–                      ——————– ——- ——————–        Net cash provided by operating activities                                             95,293                           32,991                           67,213                                                                                           ——————– ——- ——————–                      ——————– ——- ——————–                      ——————– ——- ——————–                                                                                                                                                                                                                                                  Cash flows from investing activities           Purchase of property and equipment                                                                    (8,339)                                                              (10,483)                                                              (19,616)           Capitalized software development costs                                                               (23,446)                                                              (21,994)                                                               (9,947)           Capitalized curriculum development costs                                                             (18,560)                                                              (16,123)                                                              (18,086)           Purchase of Kaplan                                                                                         -                                                                (12,641)                                                                    -           Purchase of AEC, net of cash acquired of $3,841                                                            -                                                                      -                                                                (24,543)           Purchase of IS Berne, net of cash acquired of $1,563                                                       -                                                                      -                                                                   (839)           Cash advanced for AEC performance escrow                                                                   -                                                                      -                                                                 (6,825)           Cash returned for AEC performance escrow                                                                   -                                                                      -                                                                  6,825           Cash paid for investment in Web                                                         -                                -                          (10,000)                                                                                           ——————– ——- ——————–                      ——————– ——- ——————–                      ——————– ——- ——————–        Net cash used in investing activities                                                (50,345)                                           (61,241)                                           (83,031)                                                                                           ——————– ——- ——————–                      ——————– ——- ——————–                      ——————– ——- ——————–                                                                                                                                                                                                                                                  Cash flows from financing activities           Proceeds from issuance of common stock                                                                     -                                                                      -                                                                125,619           Repayments on capital lease obligations                                                              (20,275)                                                              (16,600)                                                              (15,135)           Repayments on notes payable                                                                           (1,533)                                                               (1,820)                                                               (1,969)           Proceeds from notes payable                                                                                -                                                                      -                                                                  1,932           Borrowings from line of credit                                                                             -                                                                      -                                                                 15,000           Repayments under the line of credit                                                                        -                                                                      -                                                                (15,000)           Proceeds from exercise of stock options                                                                7,253                                                                  3,380                                                                 13,364           Payment of stock registration expense                                                                      -                                                                   (313)                                                                    -           Excess tax (benefit) expense from stock based compensation                                             8,889                                                                 (3,122)                                                                4,954           Repurchase of restricted stock for income tax withholding                          (2,546)                                            (1,292)                                            (1,627)                                                                                           ——————– ——- ——————–                      ——————– ——- ——————–                      ——————– ——- ——————–        Net cash provided by (used in) financing activities                                   (8,212)                                           (19,767)                                           127,138                                                                                           ——————– ——- ——————–                      ——————– ——- ——————–                      ——————– ——- ——————–                                                                                                                                                                                                                                                                               Effect of foreign exchange rate changes on cash and cash                                  92                             (430)                                                28        equivalents                                                                                           ——————– ——- ——————–                      ——————– ——- ——————–                      ——————– ——- ——————–                                                                                                                                                                                                                                                                               Net change in cash and cash equivalents                                                                  36,828                                                                (48,447)                                                              111,348        Cash and cash equivalents, beginning of year                                         144,652                          193,099                           81,751                                                                                           ——————– ——- ——————–                      ——————– ——- ——————–                      ——————– ——- ——————–        Cash and cash equivalents, end of year                                                                $ 181,480                                           $ 144,652                                           $ 193,099                                                                                           ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                                                                                                                                                                                                                                                                               

    Non-GAAP Financial Measures

    EBITDA

    EBITDA consists of net income (loss), plus net interest expense, plus income tax expense, minus income tax benefit, plus depreciation and amortization and noncontrolling interest charges. Interest expense primarily consists of interest expense for capital leases and long-term and short-term borrowings. We use EBITDA in addition to income from operations and net income as a measure of operating performance. However, EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or GAAP, and when analyzing our operating performance, investors should use EBITDA in addition to, and not as an alternative for, net income (loss) as determined in accordance with GAAP. Because not all companies use identical calculations, our presentation of EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, EBITDA is not intended to be a measure of free cash flow for our management’s discretionary use, as it does not consider certain cash requirements such as capital expenditures, tax payments, interest payments, or other working capital.

    We believe EBITDA is useful to an investor in evaluating our operating performance because it is widely used to measure a company’s operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of corporate performance exclusive of our capital structure and the method by which assets were acquired. Our management uses EBITDA:

    – as an additional measurement of operating performance because it assists us in comparing our performance on a consistent basis;

    – in presentations to the members of our Board of Directors to enable our Board to have the same measurement basis of operating performance as is used by management to compare our current operating results with corresponding prior periods and with the results of other companies in our industry; and

    – on an adjusted basis in determining compliance with the terms of our credit agreement.

    The following tables provide a reconciliation of net income to EBITDA.

                                                                                                                                                                                                                                                                             Three Months Ended June 30,                                                                                                                      Year Ended June 30,                                                           ———————————————————————————————————————–                     ————————————————————————————————————————                                                                                 2013                                               2012                                                                   2013                                               2012                                                                                ——                                                                ——                                                                ——-                                                                ——                                                                            (In thousands)        Net income                                                            $  2,268                                                              $  1,801                                                              $  28,111                                                              $ 17,543        Interest expense, net                                                   (1,657)                                                                 267                                                                   (851)                                                                 989        Income tax expense                                                       1,828                                                                   571                                                                 20,023                                                                11,882        Depreciation and amortization                                           17,562                                                                15,708                                                                 65,737                                                                58,033        Noncontrolling interest                              (1,018)                                             (607)                                            (1,577)                                           (1,434)                                                           ——————– —— ——————–                      ——————– —— ——————–                      ——————– ——- ——————–                      ——————– —— ——————–        EBITDA                                                                $ 18,983                                           $ 17,740                                           $ 111,443                                           $ 87,013                                                           ==================== ====== ====================                      ==================== ====== ====================                      ==================== ======= ====================                      ==================== ====== ====================                                                                                                                                                                                                                                                                                       

    About K12 Inc.

    K12 Inc. LRN +2.14% is leading the transformation to individualized learning as the nation’s foremost provider of technology-powered online solutions for students in pre-kindergarten through high school. K12 has worked with over 2,000 school districts and has delivered more than four million courses over the past decade. K12 provides curricula, academic services, and learning solutions to public schools and districts, traditional classrooms, blended school programs, and families. K12’s curriculum is rooted in decades of research combined with 21st-century technology by cognitive scientists, interactive designers and teachers. K12’s portfolio of more than 550 unique courses and titles–the most extensive in the technology-based education industry–covers every core subject and four academic levels for high school including Honors and AP. K12 offers credit recovery courses, career-building electives, remediation support, six world languages and a deep STEM offering. The K12 program is offered through K12 partner public schools in more than two-thirds of the states and the District of Columbia, and through private schools serving students in all 50 states and more than 100 countries. More information can be found at K12.com.

    SOURCE: K12 Inc.

                    K12 Inc.         Investor Contact:         Christina L. Parker, 703-483-7077         VP Investor Relations         chparker@k12.com         or         Press Contact:         Jeff Kwitowski, 703-483-7281         SVP Corporate Communications         jkwitowski@k12.com